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When Jun eventually comes face to face with Kazuya, she tries to arrest him, but instead the both of them can not help being drawn to one another, propelled by a mystic force beyond Jun's control. In an attempt to rid himself of Heihachi and his enemies once and for all, Kazuya announces the King of Iron Fist Tournament 2, with a large cash prize of one trillion dollars, knowing that Heihachi will appear. Heihachi on the other hand, whom Kazuya had defeated and thrown off a cliff two years ago, has climbed back up and is training himself, plotting to overthrow Kazuya. Meanwhile, Kazuya is sentenced to being arrested by animal rights activist and operative Jun Kazama for his experiments. The reason for his evil deeds is because he has allowed the Devil Gene within him to consume him as a result of his hatred towards Heihachi. He hires assassins to eliminate any of his critics and rivals, attempts to extort money from several businesses and organizations, and smuggles endangered species to conduct genetic experiments on them. While his father Heihachi Mishima was rather ruthless in his endeavors, Kazuya acts completely without a conscience. Two years after the events of the King of Iron Fist Tournament, the Mishima Zaibatsu, under the leadership of Kazuya Mishima, has become more corrupt and powerful than ever before, and is involved in many illegal operations.
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The screen normally defaults the character option to Jun Kazama, but the arcade version contains a code that can toggle it to Baek Doo San and vice versa. Like the first game, the character select screen only displays the 10 default ones, with the others being selected by scrolling past the screen to the left or right. Out of the 25 playable fighters, only 10 are available by default, with the rest being made available through updates (the arcade version) or by clearing the Arcade Mode with different characters (the console version).
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Devil Kazuya, originally a bonus palette swap of Kazuya reserved for the home console version of the first game, is also made as a full playable character and serves as this game's final boss.
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Characters who were clones in the original game have been made into distinct playable characters, although they still share many moves with the originals. The game features a total of 25 fighters, consisting of 8 newcomers and 17 returning veterans. Time Attack mode is similar to Arcade mode, except it is played to see how fast the player can go through it and beat records.
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Like Survival mode, any health lost during a match will carry over to the next match, but the player will regain a small amount. Team Battle mode is a two-player mode which up to eight characters can be selected by each player. In addition, any health lost during a match will carry over to the next match, but the player would regain a little bit more health. Survival mode takes the player through an endless number of matches to see how many opponent they can defeat without being defeated themselves. These include Survival mode, Team Battle mode and Time Attack mode. Tekken 2 also introduced various modes that would become staples to the series. Each time the game is beaten with one of the default available characters in arcade mode, the associated sub-boss character becomes selectable. Tackles were also modified to inflict damage when running from a greater distance. However, Yoshimitsu has a spinning sidestep move that lowers his health. Distinct additions included attack reversals for some characters, back throws, chain-throws and a sidestep unique to two characters, Kazuya Mishima and Heihachi Mishima.
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It continues to use 2D backgrounds in its stages, an infinite playing field and a fighting system that utilizes four buttons: left punch, right punch, left kick and right kick. The gameplay in Tekken 2 is much like its predecessor with a few additions.
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